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VOL. 6 | NO. 17 | Saturday, April 20, 2013

Daily Digest

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General Assembly Passes Haslam's $32.8 Billion Budget

Gov. Bill Haslam’s $32.8 billion budget has cleared the Tennessee General Assembly.

The Senate unanimously approved the spending plan on Wednesday afternoon, and the House later followed suit on an 83-14 vote.

On Thursday, the Senate unanimously agreed with minor changes the House made and sent the proposal to the governor.

The budget includes $77.4 million for a 1.5 percent pay raise for state employees, $22.2 million to reduce the sales tax on food by a quarter of a cent, and $18.7 million to continue the elimination of the state’s inheritance tax.

The measure also has $100 million to shore up the state’s rainy day fund, which is currently $356 million.

South Main Design Challenge Goes Public

The latest and final part of the South Main Design Challenge, a competition among 35 teams of planners and architects, goes public Friday, April 26, at 431 S. Main St.

The presentation will be from 6 p.m. to 9 p.m. during the monthly Friday Art Trolley Tour.

The 15 teams remaining in the competition will unveil their concepts for three more parts of the South Main streetscape: Army and Navy Parks, the one-story brick storefront that now has a plywood mural of buffaloes, and the fenced lot south of the Arcade restaurant that has a set of red banners with lyrics from songs that mention Memphis.

The Downtown Memphis Commission and the Memphis chapter of the American Institute of Architects present the competition.

Raymond James Makes ‘Unprecedented’ Job Cuts

Raymond James Financial Inc. has undertaken a round of job cuts it says is “unprecedented in the firm’s history.”

And it’s attributing the cuts to remaining employee overlap from the April 2012 acquisition of Morgan Keegan & Co. Inc.

Raymond James acknowledged it’s trimming its employee headcount by a little more than 3 percent at its St. Petersburg, Fla., home office.

The roughly 115 job cuts there leave the home office staff level at approximately 3,200.

Meanwhile, about 45 other positions are being cut at other Raymond James locations around the country, including 18 positions in Memphis.

Raymond James says it maintained “elevated staff levels” since its purchase of Morgan Keegan to “ensure a consistent service experience for clients and to assist with the consolidation of the two firms.”

The integration was completed in February.

“We are grateful for the dedicated service of associates impacted by these changes, and affected individuals were offered severance and career transition assistance,” reads a statement from the company. “These were not easy decisions, and we made every effort to be thoughtful and deliberate in our approach to achieving our staffing goals.

“While an adjustment of this size is unprecedented in the firm’s history, it is the consequence of an equally unprecedented acquisition. We do not expect additional sizeable employment-related changes.”

Casada Faces High Hurdle on Campaign Finance Bill

An effort to revive a failed bill to boost the amount of money political groups can give to candidates and to do away with reporting requirements for donations by corporations faces a high hurdle in the House.

The bill sponsored by House Republican Caucus Chairman Glen Casada of Franklin on Wednesday received only 48 votes on the House floor – two short of the constitutional minimum to clear the chamber.

While Casada tells The Associated Press he found enough votes to pass the bill in the House, the clerk’s office confirms that he would need to gain a two-thirds vote in the committee that sets floor calendars.

That panel includes House Speaker Beth Harwell and several chairmen who either abstained or voted against the bill on Wednesday.

Triumph Bank Takes Top SBA Lender Spot

Memphis-based Triumph Bank is in the top spot on a recently released list by the U.S. Small Business Administration of lender rankings by loan dollar amounts in Tennessee.

The list covers Oct. 1 through Feb. 28. Triumph was ranked as the No. 1 SBA lender in the state, with a total of $5.8 million in SBA loans. Also, Triumph’s loan volume was focused mostly on Shelby County, underscoring its local emphasis.

According to the SBA list, Triumph Bank outperformed more than 40 lenders.

Triumph president Will Chase said SBA lending has been a major factor in the bank’s growth. Triumph was founded in 2006 and has grown its assets to more than $400 million.

Trustee Tax Sale Makes $350,000

The most recent tax sale by the Shelby County Chancery Court Clerk’s office of tax delinquent properties brought in more than $350,000, according to Shelby County Trustee David Lenoir.

The Trustee’s office provides management support for the property sales at auction.

A total of 10 properties were sold Monday, April 8, at the auction that featured 36 properties.

There were 58 registered bidders in the process.

For all 10 properties, the total bid price was $357,473.11.

The amount is $195,000 above the total minimum bid amount for the 10 properties combined. The minimum bid amount on each property is based on the taxes and penalties due.

Some of the properties were much higher than the minimum bid.

A Lakeland property at 10123 Gillespie Oak Drive drew a high bid of $180,000 after starting at a minimum bid of $21,599.

Shelby County bought 24 of the properties for a total minimum bid of $121,755 and will eventually turn them over to the Shelby County Land Bank.

The land bank will market those 24 to recoup the cost and return them to the tax rolls.

TVA Board Chair Says Public Utility 'Good Model'

The chairman of the Tennessee Valley Authority has expressed confidence in the organization following a proposal in the 2014 Obama budget last week that suggested a possible sale of the public utility.

At a Thursday, April 18, TVA board meeting, Bill Sansom said the board welcomes a proposed strategic review of the agency and any suggestions for ways to better serve the people in its seven-state region.

Sansom said he believes TVA is a good model and the review will also be good.

But Sansom also said some areas need improvement and he suggested that making those improvements could help TVA in the upcoming review.

The board also approved creating an advisory council on energy resources.

Among other things, the council would advise staff on energy efficiency and renewable energy.

Measure of US Economy’s Health Declines in March

A measure of the U.S. economy’s future health declined slightly in March, signaling that growth could slow this spring.

The Conference Board says its index of leading indicators dipped 0.1 percent last month to 94.7. That’s the first decline after three months of gains. The gauge is designed to anticipate economic conditions three to six months out.

Declines in consumer confidence, housing permits and new orders for manufactured goods pushed down the index.

Higher stock prices and a larger spread between long-term and short-term interest rates offset the decline.

The index is derived from data that for the most part have already been reported individually.

“Data for March reflect an economy that has lost some steam,” said Ken Goldstein, an economist at the Conference Board.

Across-the-board government spending cuts that kicked in March 1 are likely weighing on growth, Goldstein said. Economists forecast the cuts will shave a half-percentage point from growth this year.

The private sector is also struggling, Goldstein added. “The biggest challenge remains weak demand, due to nervous consumer sentiment and slow income growth,” he said.

But overall, “the leading indicator still points to a continuing but slow growth environment,” Ataman Ozyildirim, also an economist at the Conference Board, said. The board is a research group with a mostly business membership.

The Leading Indicator index has increased 1.6 percent in the past six months, much faster than the 0.1 percent gain in the previous six months.

Most economists forecast growth accelerated to an annual rate of roughly 3 percent in the January-March quarter, up from a 0.4 percent rate in the fourth quarter.

But many analysts expect growth is slowing in the April-June quarter, mostly because of the spending cuts. Some economists are forecasting a growth rate of 1.5 percent for the second quarter.

Arkansas Lawmakers Push Ethics, Campaign Reform

An Arkansas legislative panel has advanced an effort to outlaw most lobbyist gifts to elected officials, ban corporate campaign contributions and loosen term limits for state lawmakers.

The Joint Committee on Constitutional Amendments on Thursday approved a proposal to let voters decide on adding a package of ethics and campaign finance rules to the state’s constitution.

A previous version of the proposal cleared the House earlier this month, but was rejected earlier this week when the backers sought to make several minor changes to the bill.

The panel also endorsed another proposed amendment that would have made it harder for people to get their proposals on the Arkansas ballot.

Both measures now head the House and Senate. If approved, they would appear on the 2014 ballot.

CBIZ Memphis Hosts Conference Next Month

The Memphis office of CBIZ MHM is hosting a CFO/Controller Conference next month at the Fogelman Executive Center on the University of Memphis campus.

The event on May 14 will run from 9 a.m. to 1 p.m. Presentations will focus on providing CFOs and controllers with direction on addressing current challenges within their respective organizations.

Topics will include the current business lending environment, data breach and security standards, hiring practices, and the Affordable Care Act.

Attendees can register for the conference online (http://cfocontrollerconfmay2013.eventbrite.com) for a fee of $50, which includes the cost of breakfast and lunch.

For more information about CBIZ Memphis and the CFO/Controller Conference Series, visit www.cbizmemphis.com.

Family Safety Center Adds New Partner Organizations

The Family Safety Center, an organization that provides services to victims of family violence, said it recently added Adoption Counseling Services Inc., Friends for Life Corp., and Memphis Shelby Crime Commission to its list of partner organizations.

The Memphis Shelby Crime Commission played a key role in the formation of the Family Safety Center, but only recently became an official partner. Adoption Counseling Services provides counseling and child placement services for expectant parents, while Friends for Life assists people affected by and living with HIV and AIDS.

Olliette Murry-Drobot, executive director of the Family Safety Center, says each of the organization’s partners offers specific services that can address the varied needs of family violence victims.

State Must Release Information in Child Deaths

The state Department of Children’s Services must turn over to the media records from the case files of 50 children who died or nearly died after the agency became involved with them.

Davidson County Chancellor Carol McCoy on Wednesday also ordered that the state must bear the cost of redacting identifying information from the records. The media organizations will pay the cost of making copies.

The group of plaintiffs is led by The Tennessean newspaper and includes The Associated Press.

In September, The Tennessean requested the records of all the children involved with DCS who had died or nearly died between 2009 and mid-2012. The state produced only bare-bones summaries and later acknowledged it did not know how many children had died during that period.

Council OKs Severance for Auto Inspection

Memphis City Council members approved Tuesday, April 16, a severance package for city workers at auto inspection stations as talks continue among the city, county and state governments about who will operate the emissions testing at those stations.

Council members voted last year to end all city funding of the stations and the testing effective June 30, the end of the current fiscal year.

The resolution by council member Lee Harris provides for two and a half years of pay and continuing health insurance coverage for two and a half years in what amounts to a $400,000 expense Harris proposed to pay from city reserve funds.

If the city continues to fund the emissions testing after June 30, the resolution would be void.

The council also approved on third and final reading a set of amendments to the Unified Development Code that were approved Monday by the Shelby County Commission.

In other action, the council approved the appointment of Pace Cooper as the newest member of the Memphis-Shelby County Airport Authority Board.

The council also approved a planned development at Greenlaw and North Fifth Street that is a parking lot and possible expansion area for Memphis College Preparatory Elementary School.

The council voted down a resolution appropriating $99,213 for sewer repairs to the Cedar Creek Sewer extension in an area in the Memphis annexation reserve area but not in the city of Memphis.

Council members questioned the 50-50 split with a developer the administration could not identify at a time when the city is not moving to annex any areas.

Oil Drops on Demand Concerns

More signs of weak demand for fuel in the U.S. sank the price of oil by nearly 3 percent.

The Energy Department said Wednesday that demand for gasoline over the four weeks ended April 12 was 3.3 percent less than a year earlier, averaging 8.4 million barrels a day. The weekly report indicated that use of distillates like heating oil and diesel was light as well.

The Energy Department said gasoline supplies fell last week by 600,000 barrels, only half the amount expected by analysts. At 221.7 million barrels, the nation’s supply of gasoline is 3.6 percent above year-ago levels. Wholesale gasoline futures dropped 7 cents to $2.71 a gallon.

In addition, supplies of distillate fuel posted a surprise increase of 2.4 million barrels. Analysts expected a decline of 850,000 barrels.

The drop in demand follows some weak U.S. economic data, starting two weeks ago with a disappointing employment report.

Oil has fallen sharply in the past week, part of a broad sell-off in commodities that included gold recording its biggest one-day drop in 30 years, due mainly to lower-than-expected growth in China during the first quarter of the year. Oil is now down about $8 a barrel, or nearly 9 percent, since last Wednesday.

On Tuesday the International Monetary Fund lowered its outlook for world economic growth this year to 3.3 percent from its January forecast of 3.5 percent. It expects U.S. economic growth of 1.9 percent this year, down from a January estimate of 2.1 percent, while the IMF sees the combined economy of the 17 eurozone countries shrinking 0.3 percent in 2013.

County Commission Approves Tall Trees Sale

Shelby County Commissioners approved Monday, April 15, the sale of the old Tall Trees Juvenile Detention facility at 3335 Old Getwell Road.

The 9.78 acres of land was sold for $125,000 to Errick Farmer who plans to use the site for the group Young Builders of America.

Tall Trees closed in 2004 and was declared surplus county property for sale soon after. It sold at an earlier auction for $285,00 but the buyer never closed on the purchase.

The commission also approved a set of amendments to the Unified Development Code on third and final reading Monday. The changes are part of a continual process of adjusting the code adopted by Memphis city and Shelby County governments in 2012.

Arkansas Legislature Passes Steel Mill Funding

Arkansas is set to provide a new steel company with $125 million in financing and a package of tax breaks to build a mill in the northeast part of the state after the Legislature gave final approval to the plan on Tuesday.

By an 81-9 vote, House lawmakers passed a Senate-approved budget bill to fund Gov. Mike Beebe’s proposal to provide Big River Steel with a loan and pay some construction costs of a $1.1 billion steel mill the company wants to build in Osceola.

In exchange, the company promises to create at least 525 permanent jobs with an average annual wage of at least $75,000 – twice the state’s average.

Big River Steel has said it wants to close the deal in the third quarter of this year. The plant will make steel for auto, oil and gas and electrical energy industries.

Some conservatives had lobbied against Beebe’s proposal, arguing that the government shouldn’t be subsidizing the startup costs for a private business.

Nucor Steel, which operates two facilities in the region, also urged lawmakers to reject the plan and said the competition could force it to scale back its Arkansas workforce.

Arkansas voters in 2004 gave legislators authority to borrow money for economic development after narrowly missing out on a Toyota truck plant that was eventually built in San Antonio.

Arkansas was also an also-ran in 2007, when Toyota opted to build a Highlander SUV plant in Tupelo, Miss.

This is the first time Arkansas has issued bonds since the amendment passed.

Bank on Memphis Honors Financial Literacy

Bank On Memphis, a campaign that provides financial literacy and financial access through public, private and nonprofit collaborations, is celebrating National Financial Literacy Month in April.

The celebration will include a series of financial literacy workshops culminating with an April 26 event at Court Square.

Several Bank On Memphis partner financial institutions and credit counseling services will be available to discuss savings and checking account options, as well as tips for credit repair.

Preceding the event, Bank On Memphis representatives will conduct free financial literacy classes on personal finance and budgeting. For a complete list of those events, visit the event calendar at www.shelbycountytrustee.com.

Magna Bank Makes Several Appointments

Magna Bank has named Frazer Gieselmann as senior vice president and manager of construction lending.

As manager of construction lending, he will lead the bank in providing construction loans to individuals and builders.

Gieselmann joins Magna from Cadence Bank, where he was a senior vice president in the construction lending and bank-owned real estate departments.

Magna also has hired new employees in its commercial real estate, retail banking and mortgage departments.

Wendy Boles has been hired as a senior loan analyst in commercial real estate to support Magna’s commercial and multifamily real estate division. Previously, she was a loan administrator at Financial Federal Bank.

Christine Cormack will lead new business development at Magna’s Oak Court branch. She previously worked at several Wells Fargo branches and as a branch manager at SunTrust.

And Kathy Wash has joined Magna Bank as a service and compliance analyst in the bank’s mortgage servicing unit. She previously worked as a real estate owned property manager.

Judicial Redistricting Passes in Senate

A proposal to redraw Tennessee’s judicial districts for the first time since 1984 has passed the Senate.

The plan from Republican Senate Speaker Ron Ramsey of Blountville was approved 27-4 on Tuesday.

The measure would affect 22 counties in eight districts. The number of judicial districts have been reduced from 31 to 29.

The proposal would create separate judicial districts for Rutherford and Williamson counties because of population growth in the Nashville suburbs.

Two judicial districts in northwestern Tennessee made up of Lake, Dyer, Obion and Weakley counties would be merged into a single district. Coffee County would be folded into one with Cannon, Warren and Van Buren counties.

Emkes Leaves as State Finance Commissioner

Tennessee Finance and Administration Commissioner Mark Emkes is leaving the administration of Tennessee Gov. Bill Haslam at the end of May, Haslam announced Monday, April 15.

Emkes, the former CEO and president of Bridgestone Americas, is leaving to be with his wife in Spain.

Emkes was Haslam’s pick for the critical posting before he took office as governor in 2011. Haslam said Monday he has begun a replacement search.

As Department of Finance and Administration commissioner, the 60-year-old Emkes has been responsible for budget matters and managing the state’s day-to-day finances.

Emkes’ retirement comes following Haslam’s decision to forgo – at least for the time being – $1.4 billion in federal money in the upcoming budget year for Medicaid expansion while pursuing a special arrangement with the U.S. Department of Health and Human Services.

Governor Signs Public Notices Bill

Gov. Bill Haslam has signed a bill to require public notices to be published on newspaper websites.

The measure maintains a requirement for public notices to be published in the print editions of newspapers. It would also create a statewide online clearinghouse for all notices.

Sponsors say the Tennessee Press Association called for the changes in the interest of enhanced transparency.

“The public notice law is a positive step forward for government transparency,” said Kent Flanagan, director of the Tennessee Coalition for Open Government.

“It actually ensures that public notices will be posted on third party independent websites.”

The measure was sponsored by Republican Sen. Ken Yager of Harriman and Rep. Ryan Haynes, R-Knoxville.

The House approved the legislation 94-1, and it passed the Senate 31-1.

Evolve Chairman Joins MED Board of Directors

Scot Lenoir, Evolve Bank & Trust chairman, has been appointed to the board of The Regional Medical Center at Memphis.

The MED President and CEO Dr. Reginald Coopwood said Lenoir’s extensive financial background makes him a strong fit for the board.

Memphis-based Evolve currently operate five full-service branches in Arkansas and Tennessee with 35 mortgage production offices around the country.

PROPERTY SALES 56 94 12,852
MORTGAGES 23 50 8,053
BUILDING PERMITS 285 422 30,356
BANKRUPTCIES 23 67 6,131